CHICAGO – New research from the Perishables Group reveals premium priced options are driving growth in the produce department.
The information was released in the Perishables Group’s new Produce Department Drivers report, which integrates point-of-sale supermarket data, consumer demographic profiles, shopper loyalty card data with secondary research to determine the most important factors impacting department performance.
Fresh department sales, including produce, deli, bakery, seafood and meat, comprised a growing percentage of total store sales in recent years, and in 2010 the produce department posted dollar and volume growth despite higher prices.
The report attributes produce sales growth in part to consumers’ loyalty to the department.
“The produce department is unique in a store because all households purchase from the department,” said Bruce Axtman, Perishables Group president and CEO. “It’s a major driver of customer traffic to a store, and consumers showed that they are willing to spend money on fruits and vegetables.”
According to the report, consumers are focusing less on promotions in produce. The percent of volume sold on promotion declined last year for all of the top 10 produce categories, except cooking vegetables. Ad counts also declined for seven of the top 10 produce categories.
Shoppers were willing to pay a premium for convenience, as sales of all prepared fruit and vegetable segments grew in the past year. Despite higher price points, the percentage of households that purchased prepared fruits and vegetables increased, as did the frequency of those purchases.
Organic produce is also gaining ground, according to the report. Between 2005 and 2010, organic packaged salads, berries, apples and tomatoes led growth with double- and triple-digit sales increases; this was fueled by more organic items on the shelf, as item count increased between 46 percent for tomatoes and 115 percent for berries. Organic sales now comprise 5.4 percent of produce department dollars.
The report suggests strategies for coping with growing competition for shelf space in the produce department.
“The number of fruit and vegetable items in stores increased 38 percent and 33 percent respectively between 2005 and 2010,” Axtman said. “Now more than ever, it’s essential to follow a sophisticated and deliberate process for new product development and rollout.”
For more information or to purchase the Perishables Group Department Drivers reports, e-mail kellib@perishablesgroup.com or call 773.929.7013.
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About the Perishables Group
The Perishables Group is a Chicago-based consulting firm focused on creating innovation and value for clients in the fresh food industry. Perishables Group expertise includes consumer research, analytics, marketing communications, category development, supply chain management and activity-based costing.
Source: The Perishables Group
